News for
December 17, 2025

 

By Myrna Trauntvein
TN Correspondent

Once again, Nephi City achieved a clean audit of the city’s financial records.

“A clean audit opinion, also known as an unqualified opinion, is the best possible outcome of an independent financial audit, signifying that an organization’s financial statements are fairly presented, accurate and compliant with accounting standards like GAAP, with no material misstatements found,” said Jon Haderlie, CPA and Partner at Larson & Company.

He said that while it’s a positive report card showing financial integrity, it doesn’t guarantee future financial health, only that the records themselves are reliable.

“Ethics are the foundation of our profession. Our commitment to honesty and transparency means clients always get the accurate information they need. We never compromise our standards to win favor,” he said.

He said that the audit was for business-type activities, each major fund, and the aggregate remaining fund information for Nephi City as of June 30, 2025.

Financial highlights were that the total net position of the city increased by $6,043,766 to $71,799,642. The government net position increased by $993,452 and the business type net position increased by $5,050,314.

A net position shows how much of the entity’s resources are not owed and categorized as: Net Investment in Capital Assets, Restricted, or Unrestricted, indicating financial health and resource availability.

The total net position of $71,799,642 is made up of $49,047,543 net investment in capital assets and $22,752,099 in other assets.

The General Fund, the primary operating fund, had a decrease in the fund balance of $999 to $1,206,987.

“Nephi’s management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principals generally accepted in the United States of America, and for the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error,” said Haderlie.

He said that, as auditors, their responsibility was to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement and to issue an auditor’s report that includes the auditor’s opinions.

Haderlie said that, while the management’s letter and analysis was included with the audit, it was not part of the audited information. However, it was intended to serve as an introduction to the city’s basic financial statements. They provide readers with a broad overview of Nephi City’s finances in a manner similar to a private-sector business.

“A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specified activities or objectives,” he said.

Nephi’s major governmental funds are the General Fund and the Capital Projects Fund. All other governmental funds are determined to be non-major funds.

The other funds are Proprietary, Internal Service Funds and Fiduciary Funds.

By far, the largest portion of Nephi’s net position, or $49,047,543, reflects its investment in capital assets such as land, buildings, infrastructure assets and machinery and equipment.

The city uses capital assets to provide services to citizens. These assets are not available for future spending.

“It was necessary to perform a single audit,” said Haderlie.

A single audit is the specific, comprehensive audit required for non-federal entities (like governments) spending over a certain threshold of federal funds, combining financial statement audits with rigorous checks on internal controls and compliance with federal laws for major programs, making it far more detailed than a standard, regular financial audit. Think of it as one big audit covering everything federal, not multiple smaller ones for each grant.

Haderlie said that the threshold had been $750,000 but, in the future, would be $1 million.

“A single audit is required if an agency receives either directly or indirectly in the form of grants, contracts, cooperative agreements, loans, loan guarantees, property, interest subsidies, insurance or direct appropriation,” he said.

The schedule does not include matching expenditures.

The city justice court needs to reconcile the court trust account with the city’s general ledger monthly, he said. Once that is accomplished, he said, the justice court will be in compliance with state law.

“I would like to thank you, as our independent auditor, Lisa Brough, as finance director, and the city staff for all the work that is done to complete an audit,” said Travis Worwood, council member.

Mayor Justin Seely said that he could echo that and also wanted to extend his thanks to all those involved in the completion of the successful audit.